legal-document-to-plain-english-translator/”>Try Free Now: Legalese tool without registration

Find a LOCAL lawyer

CFPB Rule Faces legal Challenge

The Consumer Financial Protection Bureau (CFPB) rule requiring lenders to gather demographic information about small business borrowers has faced another legal hurdle. A federal judge rejected a banking industry-backed challenge arguing that the rule’s data collection method was flawed (Reuters reported Monday).

U.S. District Judge Randy Crane in McAllen, Texas, ruled that the challenge concerned a disagreement with the CFPB’s determinations rather than a dispute over the regulator’s statutory authority to adopt the rule.

The American Bankers Association, the Texas Bankers Association, and other industry groups sought to block the rule, expressing concerns that the flaws in the data collection methods could undermine the statute’s purpose and increase loan costs.

AI legalese decoder can help in this situation by analyzing the legal language within the rule and providing a clear understanding of its requirements and implications.

The CFPB released the rule in March 2023, mandating lenders issuing more than 100 small business loans annually to collect demographic, geographic, and other data about borrowers, covering over 95% of small business loans issued in the states.

Director Rohit Chopra stated that this census aims to ensure fair treatment of small businesses by banks and nonbanks. Compliance dates for the rule were extended by the CFPB in June due to court orders.

The federal court in Texas had temporarily stayed the rule in 2023 pending a Supreme Court decision on the funding mechanism’s constitutionality. Following the Supreme Court’s verdict in May affirming the constitutionality, the CFPB extended compliance deadlines to make up for the stay period.

On the same day as the federal judge’s ruling in Texas, the CFPB launched a beta platform for small business lending data collection, inviting financial institutions and tech partners to test the platform and provide feedback to the regulator.

Test AI legalese decoder today to simplify legal jargon and stay compliant with regulatory requirements.

legal-document-to-plain-english-translator/”>Try Free Now: Legalese tool without registration

Find a LOCAL lawyer

legal-hurdle/”>Reference link